Bloomberg News

Nomura Said to Prepare for Job Cuts of About 5% in Europe

September 14, 2011

(Updates with closing share price in the sixth paragraph.)

Sept. 14 (Bloomberg) -- Nomura Holdings Inc., Japan’s largest brokerage, is preparing to trim about 5 percent of jobs in Europe to reduce costs, according to two people with knowledge of the matter.

The cuts may be announced as early as today, the people said, declining to be identified because the information is confidential. Fewer than 400 positions will be eliminated globally, with the majority in Europe, one of the people said.

Nomura joins Bank of America Corp., HSBC Holdings Plc and global rivals in trimming jobs as faltering economic growth and Europe’s debt crisis threaten to curb trading income and investment-banking revenue. The Tokyo-based company, which bought Lehman Brothers Holdings Inc.’s Asian and European units in 2008, said on July 29 that it plans to reduce expenses at its wholesale unit by about $400 million annually.

“Job cuts will be inevitable under such market conditions,” said Katsunobu Komizo, chief executive officer at recruitment firm Executive Search Partners Co. in Tokyo. “Investors cannot wait for so long and expect the bank to get fruits in a short term.”

Joey Wu, a Tokyo-based spokeswoman for Nomura, declined to comment. Nomura had 4,436 employees in Europe as of June 30, most of whom are employed in its wholesale unit, which includes its investment banking and trading operations in London.

European Loss

Nomura shares fell 2 percent, to 290 yen in Tokyo. The stock dropped to its lowest close in almost 37 years earlier this week on concern that slowing growth in the global economy may hinder overseas expansion plans.

The company’s international units posted a pretax loss of 32.8 billion yen ($425 million) in the quarter ended June 30, the biggest in at least five quarters. In Europe, the company lost 31.7 billion yen, and in Asia it lost 1.5 billion yen.

“Nomura will be able to increase its income by cutting human costs,” Komizo said.

Global banks including those in the U.S. and Europe have announced 120,000 job cuts this year, according to Bloomberg Industries. Combined revenue for the 20 largest global investment banks was down 8 percent in the first half, after a 23 percent drop in the same period last year, Barclays Capital analysts said in a report last month.

Bank of America, the biggest U.S. lender by assets, said on Sept. 12 it will eliminate 30,000 jobs in the next few years, while London-based HSBC said last month it will cut 30,000 jobs worldwide by the end of 2013.

Domestic Strength

Nomura, which employs about 22,000 people in Japan, remains the dominant investment bank in its home market. It is the No. 1 equity underwriter in the country so far this year and the top adviser for mergers and acquisitions, data compiled by Bloomberg show. The brokerage is also the top arranger of Japanese initial public offering this year by the number of completed offerings, according to Bloomberg data.

Nomura and Goldman Sachs Group Inc. were among four banks chosen to manage Nikko Asset Management Co.’s IPO, three people with knowledge of the proposed sale said earlier this month.

--Editors: Chitra Somayaji, Russell Ward

To contact the reporters on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net; Ambereen Choudhury in London at achoudhury@bloomberg.net; Gavin Finch in London at gfinch@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus